Three signs you're ready to graduate from spreadsheets to analytics
Small and midsize businesses live by spreadsheets, but there are risks.
Most small and midsize businesses are firmly planted in the world of Excel.
And why not? Spreadsheets are easy to use, inexpensive and easily available – making them the preferred analytical tool for many. But spreadsheets come with their own challenges. Designed by individual users for simple calculations and projections, they can pose a real risk to the organization when used for complex, collaborative planning and analyses.
The problem is that many companies don't recognize that they've become too big for spreadsheets and other simplistic analytical tools. Result: they get mired in complexity, inconsistency, and overall poor and delayed decision-making.
To avoid getting bogged down, watch for the following signs that indicate you are ready for analytics:
- When you have too much data. Everyone is talking about big data. And rightly so. More data is being generated today than ever before in the history of mankind. But it is not about petabytes or exabytes. You have a problem when you can't derive insights from your data for timely decision making. Customer data can be your window into your customers' likes, dislikes, behaviors and attitudes. If you can't use it to build customer intimacy, improve return from your marketing spend, or leapfrog the competition, why even collect the data?
- When you're no longer in tune with your customers. Customers expect you to deliver personally relevant product and service information via their preferred channels. Failure to meet their demands can frustrate them or turn them away. Conversely, if you can personalize promotions the way that online fashion retailer Gilt Groupe does, you can convert browsing members to paying customers. Lukewarm response to promotions or disappointing campaign response rates may be a sign you're not connecting with customers. You need to determine if you know your customers well. Are your products, services and message aligned with your customers' preferences, needs and interests? If not, it is time to consider investing in more robust analytics.
- When regulatory compliance becomes a resource drain. The legislative environment is becoming increasingly complex across all industries and markets. Federal and state governments continue to issue new regulations and standards, and compliance reporting requirements are becoming all-consuming. When a compliance officer at a US credit union saw her limited IT resources used week after week to manually scan hundreds of thousands of rows of data for fraudulent activity, she knew it was time to invest in an alternative solution. Analytically robust solutions can help ensure data integrity and maintain complete audit trails so you can sleep at night.
If you think your company is too small to invest in real analytics, you may be lulling yourself into complacency. Successful companies such as TrueCar and Build-A-Bear Workshop aren’t letting their size impede them. They’re focusing on analytics to ensure that their information needs are met.
Ritu Jain is the Global Marketing Manager for Small and Midsize Business Solutions at SAS.